If there are no takers for redevelopment of dilapidated buildings in the island city, the Maharashtra Housing and Area Development Authority (MHADA) may help finance the project.

If there are no takers for redevelopment of dilapidated buildings in the island city, the Maharashtra Housing and Area Development Authority (MHADA) may help finance the project.

The state government has created a separate fund to help finance new schemes for the urban poor.

The fund, termed the Maharashtra Nivara Nidhi, will have seed money of Rs 100 crore from the state and Rs 300 crore from MHADA.

“The fund is aimed at redevelopment schemes to help finance projects that have no takers. It can also provide VGF for housing projects being developed through private partnership,” said MHADA Chief Executive Officer Gautam Chatterjee.

The housing authority can also now provide viability gap funding (VGF) for big-ticket housing projects such as Dharavi redevelopment or a cluster redevelopment project on its own, instead of approaching the Centre.

The Housing department’s recent government resolution states the budget for new schemes or financing housing projects for the poor is often insufficient.

Officials in the state secretariat said the move will boost housing schemes like cluster redevelopment, redevelopment of dilapidated buildings and slum rehabilitation projects that require a grant from the state.

Chatterjee said the fund is also expected to provide the state’s share for various central schemes such as the Rajiv Awas and Indira Awas Yojana and similar schemes under the Jawaharlal Nehru National Urban Renewal Mission, aimed at housing urban and rural poor.

The GR states that around 27 lakh families live in slums in the state and around 6 lakhs in rural areas are homeless.

The fund will also get a big chunk of its resources from MHADA. For instance, 90 per cent of MHADA’s revenues under the slum rehabilitation scheme will be deposited in this fund.

Fifty per cent of its earnings will come from redevelopment of MHADA colonies that have been granted Floor Space Index of 2.5.

The fund will be under the administrative and financial jurisdiction of MHADA and will be audited annually by the Auditor General.